Decibel Cannabis Reports 22% Drop in Revenue
Calgary, AB – Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) has released its unaudited interim financial results for the three and six-month period ending June 30, 2024. Despite facing challenges in market share, the company’s CEO, Benjamin Sze, remains optimistic about future growth by focusing on execution and capital efficiency.
Key Points from the Second Quarter Report:
- National Market Share: Decibel held a 5.6% market share in Q2 2024, making it the 4th largest licensed producer in Canada.
- Net Revenue: $22.1 million in Q2 2024, down 22% year-over-year due to increased competition and market transitions.
- Gross Margin: 42% in Q2 2024, impacted by a $1.4 million inventory write-down.
- Adjusted EBITDA: $3.9 million in Q2 2024, a 46% decline from the previous year.
- Free Cash Flow: $0.9 million in Q2 2024, a 194% increase from the same period in 2023.
Financial Highlights for Q2 2024:
- Gross Canadian recreational sales: $33,644 thousand
- Net Canadian recreational sales: $22,125 thousand
- International sales: $37 thousand
- Adjusted EPS: $0.00, down $0.01 from the previous year
The company recorded a net income of C$122,000 for the quarter, while its adjusted net income amounted to C$607,000, a decline from C$4.3 million in the second quarter of 2023.
At the end of Q2 2024, Decibel held C$39.6 million in outstanding debt and maintained a cash position of C$2.4 million. The company’s management discussion and analysis highlighted “significant uncertainty” regarding its ability to meet commitments and continue operations in the future.
Overall, Decibel’s financial performance in Q2 2024 reflects a challenging market environment. Entry-level investors should monitor market conditions and Decibel’s efforts to regain its market share in the cannabis industry.
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